Name and Location
Sishen Western expansion project (SWEP), Northern Cape, South Africa.

Client
Sishen Iron Ore Company (SIOC), in which Kumba Iron Ore owns a 74% share.

Project Description
The SWEP is designed to extend the expected life-of-mine at the Sishen mine and will provide access to 283-million tonnes of run-of-mine ore.

The second phase of the project will involve the resettlement of the Dingleton town. This project facilitates access to additional resources in 2015 and is currently in feasibility stage.

Value
Not stated.

Duration
Not stated.

Latest Developments
According to a statement by Kumba, significant progress has been made in progressing the SWEP.

A major milestone in the development of the project has been the relocation of the Transnet railway line, which was completed in May this year. The railway line was relocated from the west of the current Sishen pit to the far western extent of the SIOC property.

The properties on which the railway line was situated are 30m wide and traverse 14 km over the Sishen mine area in a north-to-south direction, immediately adjacent to the current Sishen pit.

As part of a sequenced programme to progress the SWEP project, agreements have been concluded with Transnet, in terms of which the SIOC will be granted ownership of the surface rights over the properties where the railway line used to run. In turn, the SIOC will grant surface right ownership to Transnet for the properties where the new railway line will be established.

Registration of the ownership rights to reflect this transaction is pending at the deeds registry.

As a result of Transnet having previously held the surface rights over the rail properties, the properties are excluded from the Sishen mining right area.

The SIOC has applied to the Department of Mineral Resources (DMR) to obtain the necessary rights in relation to the rail properties. The 2013 mining schedule does not contemplate any mining activities on the rail properties, but it is currently contemplated that these areas will be affected by prestripping from 2014.

Kumba says the status of the application for the mining rights does not, currently require an adjustment to the SIOC’s total reserve base for the Sishen mine of 918.9-million tonnes as at December 31, 2012, as SIOC is confident that there is a reasonable expectation of these rights being granted by the DMR.

The ore reserves in the rail properties are not considered significant, as they constitute about 3.3% of the ore reserve. However, should the applications be unsuccessful, the expansion of the Sishen pit in a westerly direction may be materially affected because in the medium and long term, the SIOC will potentially not be able to access about 33% of the Sishen reserve currently included in SIOC’s life-of-mine.

Kumba notes that the current ore reserve classification in the area affected by the applications may require adjustment in the 2013 resource and reserve statement to reflect the adjusted confidence level associated with the exploitation of these reserves. Should the matter not be resolved when the SIOC presents the reserve classification in relation to Kumba’s financial year, which ends on December 31, the company will conduct a detailed assessment to determine whether to restate the ore reserve classification.

The SIOC aims to engage actively with the DMR to ensure the speedy resolution of this matter.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Project development remains within budget and construction activities have been completed.

Contact Details for Project Information
Kumba Iron Ore manager corporate communication, Gert Schoeman,
tel +27 12 683 7019 or email gert.schoeman@angloamerican.com.